Hungary's MOL instructs lawyers over INA dispute in Croatia

13 September 2013 15:08[Source: ICIS news]

LONDON (ICIS)--Hungary's MOL will commence legal action against the Croatian government if a workable solution to disagreements over its investments in refiner INA cannot be found, the oil, gas and petrochemicals company said on Friday.

In a statement released by MOL international communications representative Judit Nemeth, it added: “Whilst it is clear that finding a workable solution together [with the Croatian government] is in the best interests of all stakeholders in INA, MOL recognises that it must also protect its own stakeholders and being a publicly listed company, is finding itself under certain legal obligations vis-à-vis its shareholders and stakeholders to further pursue good faith negotiations, and failing that, to commence the most appropriate legal action. We can confirm also that MOL has instructed counsel in connection with its investments in INA.”

The statement also noted: “We are hopeful that the Croatian government is as committed as we are to meeting and discussing the future direction of INA.”

Separately, a source at MOL said any legal action would seek redress for a few hundred million euros of losses, which the group feels it has suffered from one particular aspect of the dispute, namely the government's stalled takeover of INA's loss-making natural gas business.

MOL owns a 49.1% stake in INA, while the Croatian government has a 44.8% stake.

However, under a shareholding agreement reached in 2009 with a former Croatian government, MOL holds the management rights at INA.

A renegotiation of this shareholding agreement, as well as discussions over all MOL's complaints about the outcome to date of its investment in INA, were on the agenda for talks that would take place between the government and MOL from 18 September, said the Croatian finance ministry.

In late August, KBC Securities pinned a 'Sell' rating on MOL's stock, saying the dispute with Croatia over its INA investment posed a threat to the group strategy and recommending that MOL should seriously consider divesting its INA stake.